Portland, OR - Sept. 22, 2009 - As the economy slowly improves, 40% of employers are planning to rehire some former workers they laid off as either full-time employees or as consultants and freelancers to add needed skills, according to a survey by
OI Partners-Pathways (Portland), a global career transition and coaching firm.
37% of employers do not plan on rehiring any laid-off workers, and 23% are not sure of their plans, according to the survey of 318 organizations.
52% of employers have at least occasionally rehired laid-off workers as either full-time employees, consultants, or for project work. 16% of companies have frequently rehired some laid-off employees, and 36% have occasionally done so, while 29% rarely do, and 19% never do.
The top reason companies are rehiring, or planning to rehire, laid-off employees is that their skills are known to the employers. Other main reasons for rehiring former employees are: they fit into the company's culture and environment; there is a shortage of experts in specialty areas such as information technology, marketing, and finance; and it is less risky than hiring new employees.
As business picks up, employers may first hire employees for temporary and project work before hiring full-time employees, and they are more willing to bring back laid-off workers as contractors or staff. "This attitude represents a major shift in employers’ rehiring philosophy. In the past, companies would not rehire laid-off employees, but now they are more willing, and more employees may consider returning," said
Jean Erickson Walker, Managing Partner of OI Partners-Pathways (Portland). http://www.oipartners.net/"Rehiring laid-off employees is a way to keep hiring costs down, since there will not be any fees to be paid. Employers already know the workers' talents and skills, they can get back to performing their old jobs quickly, and have already demonstrated they fit well into the organization," Walker added.
Financial services companies are most likely to rehire some laid-off employees, while manufacturing companies are the second most likely. Government agencies and nonprofit institutions are least likely to rehire laid-off workers, followed by health care employers.
49% of financial services companies in the survey plan to rehire at least some workers who were laid off for reasons unrelated to their performance. 47% of manufacturing companies and 42% of services companies plan to rehire some laid-off workers. Only 21% of government agencies and nonprofits, and 24% of health care employers, are planning to rehire some laid-off workers.
"Financial services and manufacturing were among the industries affected most by the recession, and made the deepest workforce cutbacks. That is why they may be more ready than other sectors to re-hire some employees they had to let go," added Walker.
Employers have come to realize the advantages of rehiring employees they are familiar with over making potential bad hires. "The cost of a bad hire can reach as high as three times an employee's salary when including severance, unemployment compensation, recruiting expenses, lost business income and productivity, and potential wrongful termination lawsuits," said Walker.
"It pays for people who were laid off from their employers while in good standing to keep in touch with them, especially if the company's financial results improve and it begins hiring again," said Walker.
According to the results of the survey:
Plans to rehire laid off employees:Yes: 40% plan to rehire some laid-off workers as full-time employees, consultants, or freelancers
No: 37% do not plan to hire back any laid-off workers Not Sure: 23% are not sure of their plans
How often companies have rehired laid-off employees:Frequently: 16% of employers frequently rehire some laid-off workers
Occasionally: 36% of companies occasionally hire back former employees
Rarely: 29% rarely rehire laid-off employees
Never: Only 19% said they never rehire laid-off workers
Of those employers that re-hire laid-off workers, their reasons for doing so are:72% hire back some laid-off workers because of familiarity with their skills 52% rehire former employees because they fit into the company's culture and environment 33% rehire laid-off employees because there is a shortage of good specialty experts 31% hire back ex-employees because it is less risky than hiring new workers Only 14% said they rehire laid-off workers due to a shortage of good management employees
Plans by industry for rehiring laid-off employees:
Financial Services: Yes (49%), No (28%), Not Sure (23%)
Manufacturing: Yes (47%), No (22%), Not Sure (31%)
Services Businesses: Yes (42%), No (38%), Not Sure (20%)
Health Care: Yes (24%), No (41%), Not Sure (35%)
Government/Nonprofit: Yes (21%), No (55%), Not Sure (24%)
